Practice Areas

Controls on Exports of Nuclear Energy Technology and Assistance Updated

Friday, February 27, 2015

Sandler, Travis & Rosenberg Trade Report

The Department of Energy’s National Nuclear Security Administration has issued a final rule that represents the first comprehensive update of regulations concerning assistance to foreign atomic energy activities since 1986. NNSA states that these changes reflect a need to make the regulations consistent with current global civil nuclear trade practices and nonproliferation norms and to update the activities and technologies subject to the DOE’s specific authorization and reporting requirements. This rule also identifies destinations with respect to which most assistance would be generally authorized and destinations that would require a specific DOE authorization. This rule will be effective as of March 25.

The DOE’s part 810 regulation (10 CFR part 810) controls the export of unclassified nuclear technology and assistance by identifying activities that can be generally authorized by the DOE and thereby require no further authorization under part 810. This regulation also controls those activities that require specific authorization by the DOE, delineates the process for applying for specific authorization, and identifies the reporting requirements for activities subject to part 810.

Changes being made to part 810 by this final rule include the following.

Exempt Activities. The following exempt activities are added: (1) exports authorized by the Department of State, the Department of Commerce or the Nuclear Regulatory Commission; (2) transfers of publicly available information, publicly available technology and the results of fundamental research; (3) assistance for certain mining and milling activities and certain fusion reactors because these activities do not involve the production or use of special nuclear material; (4) production or extraction of radiopharmaceutical isotopes when the process does not involve special nuclear material; and (5) transfers to lawful permanent residents of the United States or protected individuals under the Immigration and Naturalization Act.

Approved Destinations. The rule generally authorizes assistance or transfers of technology to destinations listed in the appendix, rather than the previous approach of listing destinations for which a specific authorization is required.

Deemed Exports. In a new approach to deemed exports, the rule generally authorizes nuclear technology transfers to citizens or nationals of specific authorization destinations who are lawfully employed by or contracted to work for nuclear industry employers in the U.S., subject to such individuals meeting NRC unescorted access requirements and executing a confidentiality agreement to prevent unauthorized disclosure of nuclear technology to which those individuals are afforded access.

Specific Authorizations. The following are added as factors to be considered in granting a specific authorization: whether the government of the country concerned is in good standing with respect to its nonproliferation commitments, and whether the transfer is part of an existing cooperative enrichment enterprise or the supply chain of such an enterprise. The rule also describes additional factors, which include compliance with the United States’ NSG commitments, that the DOE will take into account when considering a specific authorization request for transfers of sensitive nuclear technology. Further, more detail is added about the information required for the DOE to process a specific authorization request, including applications for deemed export and deemed re-export authorizations.

This rule makes explicit the DOE’s current practice of requiring an applicant for a specific authorization to provide detailed information concerning the citizenship, visa status, educational background and employment history of each foreign national to whom the applicant seeks to grant access to covered technology. The applicant is also required to provide a description of the subject technology, a copy of any confidentiality agreement between the U.S. employer and the employee concerning the protection of the employer’s proprietary business data from unauthorized disclosure, and written nonproliferation assurances by the individual.

Companies must submit reports to the DOE concerning activities requiring specific authorization, to include information required by U.S. law concerning specific civil nuclear activities in or exports to destinations for which a specific authorization is required.

Ukraine. Advance notification requirements must be met prior to beginning any generally authorized activity in Ukraine. A written report within 10 days following the original transfer of material, equipment or technology is also required for all activities in Ukraine subject to part 810.

Authorized Destinations. Croatia is added to the appendix list of generally authorized destinations because on July 1, 2013, it joined the European Atomic Energy Community and therefore the provisions of the peaceful nuclear cooperation agreement entered into between the United States and Euratom apply to the supply to Croatia of U.S. nuclear material and equipment. Vietnam is also added to this list because on Oct. 3, 2014, a 123 agreement between Vietnam and the U.S. entered into force. However, Thailand has been deleted from this list because its 123 agreement has expired and there has not been a decision to renew it.

Current Generally Authorized Activities. Generally authorized activities for which the contracts, purchase orders or licensing arrangements were already in effect before March 25, 2015, but that require specific authorization under this final rule must be the subject of a specific authorization request by Aug. 24, 2015, but may continue until DOE acts on the request.

Previously Unreported Deemed Exports and Deemed Re-Exports. The DOE states that it recognizes that many companies with employees who are citizens or nationals of countries now subject to specific authorization requirements under this final rule may not have previously reported the transfer of part 810 covered technology to such individuals and that in many cases technology transfers have already occurred. However, a record of part 810-controlled generally authorized technology transfers to these employees is necessary for the DOE to adequately monitor these transfers. As a result, companies that have made unreported generally authorized transfers should provide the information required by section 810.11 of the final rule for each transfer to any foreign national who continues to have access to part 810-controlled technology by Aug. 24, 2015.